Corporate Finance

Code:

1EC308

Acronym:

FE

Keywords
Classification	Keyword
OFICIAL	Management Studies

Instance: 2012/2013 - 2S

Active?	Yes
Responsible unit:	Management
Course/CS Responsible:	Bachelor in Economics

Cycles of Study/Courses

Acronym	No. of Students	Study Plan	Curricular Years	Credits UCN	Credits ECTS	Contact hours	Total Time
LECO	293	Bologna Syllabus since 2012	3	-	6	63	162

Teaching language

Portuguese

Objectives

The objective of this course is to provide students with advanced and updated knowledge, both at theoretical or practical level, in the area of Corporate Finance.

The Modern Finance is based on the theories of utilities, preferences, the mean-variance, the "capital asset pricing model", the "arbitrage pricing theory", the "financial signs", positive information, the justification of regulations as well as the Modigliani-Miller theorem.

Thus, initially, we present the different risks to which companies are exposed, being devoted to each practically one chapter. In a second phase the risks are quantified. Finally, instruments are used, strategies and traditional markets.

In this context of uncertainty, it plays a central role the financial information, the concepts of return, risk, financial balance, the theorems of capital structure, dividend policies and the models of valuation and management of variable income securities.

Learning outcomes and competences

The goal is that students acquire the latest knowledge on the subject of Corporate Finance, as well as analyze real cases of national or foreign companies that develop their activity in the country.

Working method

Presencial

Program

General introduction
Chapter I: Financial Information
a) Introduction
b) Perspectives on Preparation of Information and Demand of Information
c) The Value of Information
d) Supply of Information
e) Conclusion
Chapter II: Financial Analysis
a) Introduction
b) Analysis of Company Financial Information
c) Analysis of Financial Flows
d) Development of Economic and Financial Diagnosis
e) Case Studies
Chapter III: Portfolio Management
a) Introduction
b) Market Model
c) Capital Assets Pricing Model (CAPM)
d) Arbitration Price Theory (APT)
e) Case Studies
Chapter IV: Financial Structure of Companies
a) Introduction
b) Models of "Trade-off"
c) "Pecking Order Theory"
d) Signaling theory based on the Capital Structure
e) Case Studies
Chapter V: Dividend Policy
a) Introduction
b) Irrelevance of Dividends
c) Other Theories of Dividend Policy
d) Signaling theory of Dividends
e) Case Studies
Chapter VI: Evaluation of Companies
a) Introduction
b) Evaluation Based on the Balance sheet
c) Evaluation Models Based on the "DCF"
d) Evaluation Based on the Balance sheet and the "DCF"
e) Case Studies
Chapter VII: Conclusion

Mandatory literature

Brandão E.; Finanças, Edição do autor, 7ª edição, 2012
Ross S., Westerfield R. and Jaffe J.; Corporate Finance, McGraw-Hill, 10th edition, 2012
Brigham E. e Daves P.; Intermediate Financial Management, South Wertern, Cengage Learning, 11th edition., 2012
LEVASSEUR M. e QUINTART A.; Finance, Económica, 3ª edição, 1998

Teaching methods and learning activities

The methodology consists in the exposure of the major theoretical contributions, the presentation, discussion and analysis of case studies of real companies, as well as the preparation by the students, working in groups, of an economic and financial analysis and valuation of a real company.

Evaluation Type

Evaluation with final exam

Assessment Components

Description	Type	Time (hours)	Weight (%)	End date
	Participação presencial	63,00	100,00
	Total:	-	100,00

Calculation formula of final grade

 

Continuous assessment

 

 

This assessment system comprises the following components:
. 1st test, weighting 30%,
. 2nd test (global), weighting 45%,
. Work in group, its presentation and defense, participation and attendance of students in classes, weighting 25%,

The work aims at the financial analysis and appraisal of a real company, which should take into consideration the following elements: Brief historical characterization of the company, analysis of the sector, adopted strategy, financial analysis, valuation and conclusion. Each work must be done in groups of a maximum of 4 students. The constitution of groups should be reported to the class teacher within 15 days after the start of classes.

The first part of the work (Financial Analysis) must be delivered on April 8, 2013. The second part of the work / final version should be delivered on May 20, 2013. The work should be sent by email to the class teacher (in Word and/or Excel and presentation slides in Power-Point).

Assessment by exam

In this assessment regime the final classification corresponds to that of the final exam.

It is not permitted to use scientific and graphic machines or other work elements in both tests and the final exam.